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Importance of Corporate Entrepreneurship [By Amanda Yeo]

In today’s free market economy, organizations must remain active and dynamic by constantly adapting, adjusting and redefining themselves (Kuratko et al, 2011). Prime Minister Lee Hsien Loong and Professor Arnoud De Meyer, both leaders in the political and academic field, place great emphasis on the need to be more entrepreneurial in organizations. But, paradoxically, the very things that keep a company going and successful – systems and structures to ensure stable output, routines and specializations to maintain an edge over others – act as a hindrance to entrepreneurship. Although organizations can succeed with routines and systems, they will not be able to lead the way as the globalized business environment rewards those who enter the market first (Badal, 2012).

As companies develop, they experience a change in management demands, in terms of diversity and complexity of the nature of operations. Overtime, new procedures, structures and rules are modified and introduced, which tend to systematically destroy the entrepreneurial spirit of the organization (Kuratko et al, 2011). Due to the hypercompetitive globalized business environment, it is said that ‘entrepreneurship is the core source of sustainable advantage’ in organizations today. (Kuratko et al, 2011). Hence, not only are organizations required to be ‘fast, flexible, adaptable, innovative and aggressive’ (Heavey et. al, 2009), they need to tap into their employees’ creative power (Steven Brandt, 1986).

Although organizations believe they can behave more entrepreneurially in the future, top managements suspect the push for operational efficiency has undercut entrepreneurship (Cullum et al, 2002). It is said that we are victims of our own economic progression. Even though the governing authoritarian rule in Singapore has promoted political stability and rapid economic development, it has resulted in the stifling of individual’s innovation (Bhasin). Employees are compliant and afraid to challenge the status quo and instead, take comfort in the complex bureaucratic systems that are present in organizations. This echoes the prevalent mentality of “If it’s working, why tweak it?” Also, Singapore’s risk adverse culture is to blame for hindering entrepreneurship growth among employees.

Most innovative ideas are stifled between the lines of authority. But if organizations were to do away with hierarchy, they will not be able to function optimally. In the private sector, Google is an exemplary example of a company that recognizes the benefits of a flat structure. Employees make use of the lack of authority to maximize their creativity. By believing that one should question assumptions and smash paradigms (Hamel, 2007), Google prospers in a ‘I think I can’ culture, and not the conventional ‘no you can’t’ bureaucracy (Cook). If organizations are able to adopt a decentralized approach to management structure, employees will then have the confidence to challenge the norm. Similarly, in the public sector, government organizations tend to utilize top-down approach to ensure optimal efficiency. However, such hierarchical structures hamper the success and innovation of organizations as it constrains the ability of the employee to respond in a dynamic environment and create wealth (Krut, 2012).

Furthermore, the Asian society does not tolerate failure, and the stigma attached to failure has caused employees’ confidence to plummet. This unforgiving environment is detrimental to entrepreneurship. Moreover, most locals are brought up with the mindset that career decisions are based on job security, and not so much on the desire or passion to make an impact and create new value. Thus, even if resources are provided, employees will still not behave entrepreneurially as attitude towards failure and the wrong mindset are not addressed. Instead, employees should gradually adapt to the mindset that ‘money is a means, not an end’ (Kim-Lee, 2013) and they should accept failure as part of the learning process and not an embarrassment. Also, employers must be willing to accept and applaud ‘well-intentioned’ failures (Leavy, 2005).

Moreover, if corporate entrepreneurship is not strong enough, employees will not be inclined to be creative. A vision and strategy, coupled with an environment that supports innovation – appropriate reward systems, explicit goals, organizational support and resources, is vital to corporate entrepreneurship (Brundin et al, 2006). An organization’s culture needs to be nurturing and supportive of employees’ experimentations, risk accepting and tolerant to failures. Employees must be daring enough to build something from nothing by combining available resources to exploit opportunities (Okpara, 2007).

‘One becomes an entrepreneur not by birth but by education as well as by experience’ (Volkmann 2004). To foster entrepreneurial behavior, management play a crucial role to spark the entrepreneurial spirit in employees (Frank, 2005). One should shift the current emphasis away from the importance of technical knowledge, to one that rewards creative projects which are risk taking in nature. By doing so, proactive employees with bigger risk appetites are rewarded for their creativity, and others will be inspired to follow. These are necessary for them to function innovatively as an entrepreneurial employee in the global competitive atmosphere.

In conclusion, an entrepreneurial mindset should be cultivated, thereby allowing organizations to obtain a sustainable competitive edge.